The European Union (EU) has ended its 10-year withdrawal of budget support to Zambia and has resumed its support with the first disbursement of €20 million.
Citing the government’s renewed commitment to strengthening governance and making various reforms, the EU Ambassador to Zambia, Karolina Stasiak, announced the bloc’s resumption of support today.
“A decade ago, the European Union had to withdraw its budget support from Zambia. However, with the appointment of a new cabinet in 2021, we witnessed a commitment to ambitious reforms towards strengthening governance and guiding Zambia back onto economic recovery and social development,” said Stasiak.
She acknowledged how challenging the past few years have been for Zambia, which has had to weather several crises, including COVID-19, a debt default, a cholera epidemic, and a drought that has resulted in a severe economic crisis.
She observed that despite these considerable challenges, the government had “remained steadfast in its efforts to strengthen governance, restore macroeconomic stability, and promote higher, more resilient, and inclusive growth.”
On September 27, Finance and National Planning Minister Situmbeko Musokotwane presented a K217.1 billion 2025 national budget, themed, “Building Resilience for Economic Growth and Inclusive Development” with 8.9% of the revenue expected to be foreign-funded.
The EU Ambassador stressed that the disbursed funding—€20 million—was a grant and not a loan. It will be transferred directly to the national treasury. A grant is awarded based on specific criteria with defined goals and outcomes but does not need to be paid back, nor does it attract interest, unlike a loan.
She is hopeful that the €20 million just disbursed would provide the government some breathing space and enable it to mitigate the impact of the economic crisis on the most vulnerable Zambians.
The 2025 budget is heavily skewed to support social protection, including school feeding programs, pensions, and social cash transfers.
